Card Fees ’Blunting Italy’s Competitiveness’, Says MEP

August 9, 2023
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A member of the European Parliament (MEP) has written to the European Commission about the issue of card fees for merchants in their native Italy.

A member of the European Parliament (MEP) has written to the European Commission about the issue of card fees for merchants in their native Italy.

An MEP has asked the Commission whether it believes that regulations on processing fees are warranted, as well as whether any potential legislation should factor in each member state’s tax arrangements.

The lawmaker, Isabella Adinolfi, is part of the right wing Forza Italia party, which sits with the European People’s Party in the parliament.

"The percentages paid in processing fees for card payment transactions, along with the expense of renting card readers, are driving up operating costs for Italian retailers," said Adinolfi.

"Allowing customers to pay by credit or debit card incurs considerable costs, and is taking a toll on small- and medium-sized enterprises."

The Italian lawmaker, whose EU constituency is Southern Italy, complained that the current state of affairs is "particularly alarming for both small and family-run businesses, who often cannot afford the extra expense".

"That financial burden could hamper Italian businesses and give competitors an edge, especially if they are based in member states with lower processing fees."

Adinolfi has also asked the Commission what it is doing to help provide a fair and sustainable playing field in the area of electronic payments, especially concerning the percentages that business owners are charged as processing fees, and whether it believes that these fees could undermine the Italian economy and make its businesses less competitive.

The question has been raised under Rule 138 of the European Parliament’s rules of procedure, which gives parliamentarians the right to pose questions to figures in the EU’s institutions, such as the Commission and the Council.

As a general rule, the questions shall be answered by the addressee within six weeks of being forwarded to it.

However, any MEP, political grouping or committee may every month designate one of its questions as a “priority question” to be answered by the addressee within three weeks of being forwarded to it.

Adinolfi’s intervention follows the Italian government’s moves last year to promote cash use over digital payments in the Mediterranean country.

Italy’s Prime Minister Giorgia Meloni, whose coalition government includes Forza Italia, said that she wanted to raise the limits on cash payments and support merchants to refuse cards for purchases below €60, drawing criticism from the country’s central bank.

Card fees have become an increasingly politicised issue in Europe.

The EU’s Interchange Fee Regulation was an attempt to reduce processing fees in Europe and, in general, these costs are lower compared to other jurisdictions, like the US.

Not satisfied with this, the Belgian government recently committed to reducing interchange fees further in the country – prompting outcry from its banking association. Febelfin argued that this would reduce innovation and put Belgian issuers at a disadvantage to other EU issuers.

Others have suggested that the government may be bluffing ahead of next year's federal election in Belgium.

Meanwhile, the UK’s Payment Systems Regulator is also in the process of conducting a review of card schemes and processing fees in the UK.

This was triggered by its card acquiring market review, which found that the scheme fees paid by acquirers had increased significantly from 2014 to 2018.

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